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Dayton Retail Market – Increased Occupancy and Rent Growth Expected

June 18, 2013 / By Aaron Savino, Vice President

The Dayton retail market has had a difficult last several years. It is clear that the South and Eastern Dayton retail market is strong and will continue to retain retailers and have steady to moderate growth. Recent predictions show the east market bouncing back and frustrations with the area lessening. In the Central Business District, there has been a lot of recent interest from restaurants. Interest from retailers is picking up as well but there is need for stability in the area before any large commitments will be made. Over the next few years, Dayton will see occupancy and rent growth in most areas as well as improvement in retail leasing.

Recently, online and internet sales are an increasing trend in the retail market. People have been looking to shop and purchase from larger selections with the added ease of shopping from home. According to an e-commerce article, internet retail sales will compound by 10%per year. This standard has led to the prediction that long term real estate trends in retail will involve smaller concepts, less square footage, and less stock due to online shopping demand increasing. Development of fast casual restaurants and concept stores will increase in Dayton. The areas that will continue to be most attractive for retail in the Dayton region include Beavercreek, the Dayton Mall area, the South market sector, and around Austin Landing.

Retailers in Dayton have used demographics but are also now using psychographics to pinpoint which areas fit best with which retailers. For example, the Dayton suburbs have a broader spectrum of retailers than the downtown market because of the lack of critical mass to support it. The Barbell phenomenon, or the decline of middle ground retailers of products that are mostly bought online now, is currently in effect in Dayton. These are products such as electronics, office supplies, and video games. These trends will cause the Dayton market to see smaller concepts in retail in the future. Value-oriented supercenter stores like Wal-Mart and Target will blur the lines of retail by providing a broad spectrum of products all under one roof. The retail market in Dayton will increase in areas that have a good spectrum of business and overall growth should continue. Major drivers such as Miami Valley Hospital and the University of Dayton will continue to see growth due to the sheer size and draw they both possess.

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About the author:

Aaron Savino is Vice President for Miller-Valentine Group.

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